Tag Archives: product ideas

How to Find a Supplier or Manufacturer for Your Product Idea

Sourcing products can be a huge pain for entrepreneurs. 

The Basics: What Do You Want?

In this post, a supplier is anyone who can provide inventory and products. It may be a distributor, wholesaler or manufacturer. 

First, understand what kind of supplier you want. When you figure this out, you will know what to type in when searching. These are the most common options:

  • Dropshipper
  • Supplier
  • Manufacturer

Overseas Vs Domestic Suppliers

If you want to wholesale or manufacture, you have to decide whether you will source from abroad or domestically. 

Typically, overseas suppliers are in Taiwan, India, China and other Asian countries. They are popular because they offer cheap options. However, cost is not the only factor worth considering when making this decision. There are advantages and disadvantages of sourcing both domestically and from abroad. 

Where to Begin Searching

The internet is a great place to begin your search. However, if you are looking for specific places, try the following. 

Directories: free supplier directories can be found online and they tend to be very helpful. You will find thousands of profiles for suppliers, wholesalers and manufacturers. The best domestic directories include Kompass, MFG, Maker’s Row and ThomasNet. The best overseas directories include Sourcify, IndiaMart, AliExpress, Alibaba and Oberlo. 

Google: supplier websites are not the most attractive. You may have to go to the second page of the Google search results to find them. 

Local library: you would be surprised how useful local libraries can be. 

Referrals: feel free to ask your professional networks for recommendations. If you can find successful people in your niche, the better. 

Other Research Tips

Another useful way is searching for the NAICS (North American Industry Classification System) code of your products. 

Suppliers and manufacturers sometimes list their products using the NAICS code. This makes it easier to find the supplier for your specific products. 

The NAICS directory is easily accessible online or at your local library. 

Once you have a list of several possibilities, research further to check their credibility. 

The Better Business Bureau (BBB) will show you if any complaints have been filed against them. Facebook and Google reviews will also tell you a lot. 

Requesting a Quote

Approaching your supplier is the next step. The price they will charge is probably the biggest issue in your mind. However, make sure you plan your questions and words beforehand. 

In your email, consider these important factors:

  • Your MOQ (minimum order quantity)
  • Your sample pricing
  • Your production pricing
  • Your turnaround time
  • Your payment terms

Negotiating MOQs

If you are doing this for the first time, you will soon hear about MOQs. Manufacturers may require you to buy thousands or, at least, hundreds of units as your first order. This depends on the manufacturer and the product.

When you do not have much money, MOQs can be difficult. Fortunately, they are negotiable in most cases. 

Before you get into negotiations, understand the position of the supplier first then offer a lower MOQ.

The 16-Step Guide to Evaluating the Viability of Any Product Idea

In this case, the business is built around making coconut hair oil.

Evaluating the Product Idea

The evaluation process involves answering 16 questions. Perfect answers are not exactly necessary; you can make educated guesses. 

Market Based Criteria

These criteria focus on external factors such as trending trajectory, target customer and market size, among others. 

What is the potential demand or market size?

It is not easy to perfectly gauge the demand or marketer size but you should have an idea before investing resources. Make use of services such as Google Keyword Planner Tool or Buzzsumo. 

In Canada and the USA alone, there were more than 73,000 searches for “coconut oil for hair” and related keywords per month.

This means that there are people who are interested. 

Who are you competing against?

Know your competitors to avoid surprises in future.

In the coconut oil for hair market, there are three main competition areas; commercial coconut products for hair, DIY recipes for coconut oil and pure coconut oil. 

Is it a growing market, a trend or just a fad?

You need to know the direction of the market.

The search for coconut oil, according to Google Trends, has been growing over the last years.

Can your target customers buy it locally?

If they can already buy the product locally, they may not be interested in looking for it online.

Who are you targeting?

Use Twitter to see who is searching for your product. 

Product Based Criteria

What is your selling price?

Check other similar products from similar companies to see the average price. With that price, what will be your profit margin? 

What is your markup?

The markup will be your profit and cover your overhead. Consider the cost of raw materials and production. Compared to the selling price, can you enjoy a healthy markup? 

How many SKU’s will you stock? 

SKU’s are styles and types of products. The more you stock, the more hectic the business will be. 

Will you offer a subscription? 

Being able to offer a subscription increases lifetime customer value. A subscription would not work with coconut oil because people are likely to use it as needed. 

What is the weight and size of your product? 

Heavy products are expensive to ship and may turn away customers. 

Is your product durable?

The more durable the product, the better. You will pay less for shipping. 

Will you have to deal with seasonality swings?

Seasonality wings will affect your cash flow. Coconut oil is not quite affected by seasonality swings.

Does your product solve a pain or serve a passion? 

Products that solve problems are more marketable. Coconut oil, for instance, solves the pain of dry hair.

Is your product disposable or consumable? 

Disposable or consumable products are likely to win you repeat customers. 

Is the product perishable?

Perishable products are a recipe for disaster if you do not make sales.

Is your product regulated or limited? 

Knowing this will help you plan ahead and be prepared.